First National Mortgage Investment Fund overview
From its initial public offering in 2012, First National Mortgage Investment Fund has provided unitholders with access to a portfolio of commercial mortgages originated by First National Financial LP, the Mortgage Investment Advisor of the Fund.
First National Financial LP is the wholly owned subsidiary of First National Financial Corporation, one of Canada’s largest multi-unit residential and commercial mortgage lenders.
The Fund’s investment objective is to deliver tax-advantaged monthly cash distributions to unitholders while preserving their capital. Since the IPO, the Fund’s track record is one of consistent monthly distributions.
As the Fund participates in the debt side of real estate and debt ranks ahead of equity upon dissolution, the Fund’s risk profile could be considered in relation to returns and yields for REITs and real estate companies.
For a more detailed look at the Fund’s portfolio holdings, asset allocations and investment process, see Portfolio Profile.
Items of Note:
- Security: Class A units.
- Structure: Closed-end fund listed on the Toronto Stock Exchange.
- Trading symbol: FNM.UN
- Fund NAV: $9.3200 as of December 30, 2016. For current NAV, click here.
- Closing TSX price: $9.03 as of December 30,2016. For current TSX price, click here.
- Monthly distribution amount: $0.05 cents per unit as determined by the Fund.
- Distribution frequency: Monthly as determined by the Fund, paid on or about the 15th of each month.
- Current yield: 6.64% as of December 30, 2016.
- Tax treatment: Unitholders benefit from an advantageous tax structure whereby returns are generally taxed as return of capital or capital gains until 2017. Please consult your personal tax advisor for specific tax advice .
- Forward agreement: The Fund obtains economic exposure to the mortgage portfolio through a forward agreement, meaning that the Fund’s return is based on the performance of FN Mortgage Investment Trust which was created alongside the Fund.
- Investment strategies: The FN Mortgage Investment Trust seeks to accomplish its investment objectives through prudent investments In short term (typically 12-36 months) mortgages primarily on multi-unit residential and commercial properties across Canada.
- Preservation of capital: Mortgages are secured primarily by income producing real property where the principal and interest can be serviced from cash flow generated by the underlying real property.
- Ranking: Mortgages may be either first ranking, a junior position in a first ranking mortgage, or a second ranking mortgage. Individual mortgages may be secured by more than one property owned by the same borrower.
- Investment manager: Stone Asset Management Limited, an independent, Canadian-owned asset management company founded in 1999.
- Leverage: The FN Mortgage Investment Trust may utilize loan facilities to borrow up to 25% of the total assets of the Mortgage Trust to fund working capital requirements and to fund the acquisition of mortgages from time to time.
- Termination: The Fund does not have a fixed termination date.
- Annual Redemptions: Outstanding units may be surrendered for redemption during the Annual Redemption Notice Period for a redemption price per unit equal to Net Asset Value per unit subject to certain restrictions found in the prospectus.
- Annual Redemption Notice Period: The period from the first business day in May until 4:00 p.m. (Toronto time) on the 9th day of May, or the immediately preceding business day in the event that the 9th day is not a business day.
- Monthly Redemptions: Units may be surrendered at any time to the Fund’s registrar and transfer agent for redemption at a price per unit equal to the lesser of 95% of the Trading Price and the Market Price. Any distributions declared and unpaid on or before a monthly redemption date will also be paid. Please consult the Fund’s prospectus for details.
- Management fee: 1.35% of net asset value per annum.
- Performance fee: 0.20% of any profit greater than a return based on the average 2-year Government of Canada yield plus 4%.
- Risk management: Loan-to-Value on individual mortgages will not exceed 85%, and the weighted average LTV of the entire mortgage portfolio will not exceed 75%.
- Fund Auditor: Deloitte LLP.
- Investor Contacts: Robert Inglis, Chief Financial Officer, First National Financial Corporation, 416 593 1100 email: firstname.lastname@example.org; Jeremy Wedgbury, Senior Vice President, Commercial Mortgages, First National Financial Corporation, 416 593 3007, email@example.com
This material is not to be distributed, reproduced or communicated to a third party without the express written consent of First National Financial LP and should be read in conjunction with the Fund's most recently filed Prospectus . This material is for information purposes only and does not constitute an offer to sell or a solicitation to buy securities. Past results are not intended to be indicative of future performance. Commissions, service fees, management fees and expenses may be associated with investment funds.